[02.02a] ICP Global Office

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1 [02.02a] ICP Global Office ICP Software and Validation Workshop Washington - DC, April, 22, 25 and 26, 2011

2 Outline validation tables Introduction to Validation Tables The Quanranta Tables (QTs) The Dikhanov Tables (DTs) Relation between QTs and DTs 2

3 Introduction to validation tables The main data analysis within inter-country and global validation is carried out by using two validation tables that are The Quaranta Tables The Dikhanov Tables The purpose of the both tables is to Screen the national average prices for possible errors by comparing the average prices for the same product in different countries Possible errors are highlighted by special indices This analysis can lead to Editing of price data for an item Editing of metadata for an item 3

4 Quanranta Tables validation tables The Quaranta Tables (QTs) consist of a set of tables Table details Summary tables for each BH Individual tables for each item QTs can be used for the validation of BH PPPs and PLIs Item XR-ratios and CUP-ratios Different calculation options EKS, EKS*, CPD, CPRD and W-CPD Recommended method by the TAG is weighted CPD However comparison of results for different calculation methods can be used to value given information on importance 4

5 Overview Quaranta tables QUARANTA TABLE DIAGNOSTICS - Rice Data Selection Criteria Basic Heading Code Time Period Yearly Averaging Method Arithmetic Mean Imputation CPD No of Items included in the Analysis 6 out of 6 Summary Information Run Date 4/13/2011 Average weight of Basic Heading in Total Expenditure 0.0 No of Countries included in the Analysis 18 out of 18 Average Coefficient Variation 27.4 Base Country USA Country Level Details # Shares are multiplied by Country XR PPP PLI(%) Weight # Items Var.Co. Country % 0.0 2;*0 7.2 Counrty % 0.0 5;*0 8.2 Counrty % 0.0 2;* Long grain rice, prepacked Country NC-Price Item Level Details Quotati ons Var.Co. XR-pr XR-ratio Var.Co. : Kilograms CUPprice CUPratio Pref. UoM Country NA Country NA Country NA Table details BH table Item table 5

6 Table details Quaranta tables QUARANTA TABLE DIAGNOSTICS Data Selection Criteria Basic Heading Code Averaging Method Arithmetic Mean Time Period Yearly Imputation CPD Summary Information Run Date 4/13/2011 No of Items included in the Analysis 6 out of 6 No of Countries included in the Analysis 18 out of 18 Average weight of Basic Heading in Total Expenditure 0.0 Average Coefficient Variation 27.4 Base Country Country 6

7 Table details Quaranta tables # Basic Heading Code Period Period during which the prices for the products covered by the Table were collected. Run date Run date for the tables Averaging Method Method used to calculate the averages Imputation Method used to calculate the basic heading PPPs EKS, EKS*, CPD or CPDR. # Number of Items included in the analysis National expenditure weights scaled to 100,000. That part of a country's GDP that is spent on the basic heading when both expenditures are expressed in Weight national currency and valued at national price levels. For information only: not used in the calculations # Number of Countries included in the analysis Average Coefficient Variation Overall variation coefficient i.e. the average product variation coefficient for the products priced for the basic heading. It is calculated as the unweighted arithmetic mean of the product variation coefficients at. It measures the average variation of the PPP-Ratios of all products priced for the basic heading. Base Country Base country for the calculations (currency selected as numéraire). 7

8 BH table Quaranta tables BH Table # Shares are multiplied by Country XR PPP PLI (%) Weight # Items Var.Co. Country % 0.0 2;*0 7.2 Country % 0.0 5;*0 8.2 Country % 0.0 2;*

9 Country XR PPP PLI Weight No. of Items Var.Co. BH Table details Quaranta tables BH table details Names of countries covered by the Table. Market exchange rates of the countries expressed as the number of units of national currency per unit of the numéraire currency (base country). Purchasing power parities for the basic heading calculated and expressed as the number of units of national currency per unit of the selected numéraire currency. The prices used to calculate the PPPs are the average prices in national currencies that countries report for the products they priced for the basic heading - that is, the NC-Prices. Price Level Indices. The PPPs expressed as a percentage of the corresponding exchange rate. National expenditure weights scaled to 100,000. That part of a country's GDP that is spent on the basic heading when both expenditures are expressed in national currency and valued at national price levels. Number of products that are priced by each country for the basis heading and the number of products priced by each country that are important - that is, the number of products assigned an asterisk (*). Country variation coefficient. The standard deviation of the country's CUP-Ratios for all products priced by the country for the basic heading expressed as a percentage of the arithmetic mean of the country's CUP-Ratios for all products priced by the country for the basic heading. 9

10 Item table Quaranta tables Item Table Long grain rice, prepacked Var.Co.: Kilograms Country NC- Price Quotatio ns Var.Co. XR-pr XRratio CUPprice CUPratio Pref. UoM Country NA Country NA Country NA Geo Mean

11 Code Var.Co. Pref. UoM Country NC-Price Quotations Var.Co. XR-Price XR-Ratio CUP-Price CUP-Ratio Geo Mean Item table details Quaranta tables Item table details Code, name, and summary definition of the product covered in the subsequent product section. Item variation coefficient. The standard deviation of the product's PPP-Ratios expressed as a percentage of the arithmetic mean of the product's PPP-Ratios. Unit of measurement Country name Average price in national currency (NC). Number of price observations on which the average prices in national currency are based. Price observation variation coefficient. The standard deviation of the price observations underlying the product's average price expressed as a percentage of the arithmetic mean of the price observations underlying the product's average price. The average prices in national currency in column [24] converted to the numéraire currency with the exchange rates. Standardized price ratios based on the exchange rate converted prices. The XR-Prices expressed as a percentage of their geometric mean. The average prices in national currency converted to the numéraire currency with the PPPs. Standardized price ratios based on the PPP converted prices. The PPP-Prices expressed as a percentage of their geometric mean. Geometric mean of the exchange rate converted prices and CUP-Prices 11

12 As the QTs, the Dikhanov Tables (DTs) consist of a set of tables Table details Dikhanov Tables validation tables Summary table for each BH Individual tables or rows for each item DTs can be used for the validation of Aggregated (above BH) and BH PPPs and PLIs Item XR-Ratios and CPD(R) residuals Different lay-out options including color scheme Aggregate/BH tables + full item statistics Aggregate of BH tables + simple residual rows for item Different calculation options CPD, CPRD, CPD-W 12

13 Overview Dikhanov tables Dikhanov Temporal Analysis Country1 Country2 Country3 Yearly Yearly Yearly PPP STD No.of Priced Items ER (LCU/US$) Rebased_XR PLI Table details Item Level Details Country1 Country2 Country3 Item Code Item Name Yearly Yearly Yearly Rice PPP STD PLI No.of Priced Items Long grain rice, prepacked Average Price No.of Observations Coefficient of Variation XR Ratio BH table Item table 13

14 Table details Dikhanov tables DIKHANOV Country 1 Country 2 Country 3 PPP STD No.of Priced Items ER (LCU/US$) Rebased_XR PLI

15 Table details Dikhanov tables Table Details PPP Purchasing power parities for the basic heading or aggregate covered by the Table. They are expressed as the number of local currency units per unit of the selected numéraire currency. The prices used to calculate the PPPs are the average prices in local currencies that countries report for the products they priced for the basic heading or aggregate - that is the average prices. STD Standard deviation of each country s CPD or CPRD residuals for the basic heading or aggregate. It can be converted to a country variation coefficient by multiplying by 100. # Number of products specified for the basic heading or aggregate. ER (LCU/US$) Rebased XR PLI Market exchange rates of countries expressed as the number of local currency units per US dollar. Exchange rates rebased to the numéraire currency. Number of local currency units per unit of numéraire currency. Price level indices. The PPPs expressed as a ratio of the corresponding rebased exchange rates in row. 15

16 BH details Dikhanov tables Item Level Details Country 1 Country 2 Country 3 Item Code Item Name Yearly Yearly Yearly Rice PPP STD PLI No.of Priced Items

17 BH details Dikhanov tables BH Details Item code Code of the basic heading or aggregate covered by the Table. Item name Name of the basic heading or aggregate covered by the Table. Period Period during which the prices for the products covered by the Table were collected. PPP Purchasing power parities for the basic heading or aggregate covered by the Table. They are expressed as the number of local currency units per unit of the selected numéraire currency. The prices used to calculate the PPPs are the average prices in local currencies that countries report for the products they priced for the basic heading or aggregate - that is the average prices. STD PLI Standard deviation of each country s CPD or CPRD residuals for the basic heading or aggregate. It can be converted to a country variation coefficient by multiplying by 100. Price level indices. The PPPs expressed as a ratio of the corresponding rebased exchange rates in row. # Number of products specified for the basic heading or aggregate. 17

18 Item details Dikhanov tables Item Level Details Item Code Item Name Long grain rice Average Price No.of Observations Coefficient of Variation XR Ratio Country 1 Yearly Country 2 Yearly Country 3 Yearly STD 0.25 Count 13 18

19 Item code Item details Dikhanov tables Item Details Code of the basic heading or aggregate covered by the Table. Item name Name of the basic heading or aggregate covered by the Table. Period STD Count Residual Period during which the prices for the products covered by the Table were collected. Standard deviation of the product s CPD or CPRD residuals. It can be converted to a product variation coefficient by multiplying by 100. The mean of a product s residuals is 1. Number of countries pricing the product. CPD or CPRD residuals by product and country. CPD residuals in the Dikhanov table are equal to the logarithms of the CUP-Ratios in the Quaranta table. Average Price Average price in local currency units. # Number of price observations on which the average prices at [16] are based. Coef. of Var. Price observation variation coefficient. XR Ratio Price ratios based on exchange rate converted prices. The converted prices expressed as a percentage of their geometric mean. 19

20 Relation between Quaranta and Dikhanov Tables Both tables provides essentially the same information, but Dikhanov Tables can be compiled for a group of BHs (an aggregate), they use color schemes to highlight potential outliers and can be collapsed to present only residuals for items Quaranta tables presents the relations within an item potentially clearer Relation between CUP-Ratios and CPD residuals CPD residuals are equal to the logarithms of CUP-ratios CUP-Ratios 0 to to to to to to to Less than to to to to to 2.0 More than 2.0 CPD residuals 20

21 THANK YOU 21 21

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